Center Line supports tax break for auto dealer

With the help of Center Line officials, an auto dealership is closer to getting a deal on its taxes.

The City Council has voted to support Ed Rinke Chevy/Buick/GMC’s request for a Commercial Facilities Tax Exemption certificate that would save the dealership 50 percent on its property taxes for 12 years on an $8 million renovation project.

Located on Van Dyke, south of 11 Mile Road, Rinke plans to demolish its current 17,000-square-foot showroom and offices on Van Dyke, and build a 50,000-square-foot facility. The planned building is expected to house new Chevy vehicles and have a separate showroom for Buick and GMC cars and trucks. The structure would be connected to the current repair shop.

“It’s a big project,” Edgar Rinke told council members during a recent public hearing, saying the auto sales market is “very, very competitive.”

“A lot of people think, driving up and down Van Dyke, that everything is rosy. It’s not,” Rinke said of the road that is home to several automotive dealerships from Center Line to Sterling Heights. “Business is more competitive than a lot of people think.”

He said the dealership still must get other approvals for the project to continue forward, including state government approval of the commercial redevelopment tax abatement.

The support of city officials was required for the project to shift into a higher gear.

State laws allows for 50 percent tax abatements for up to 12 years on renovated businesses located in commercial redevelopment district zones. Center Line officials said the renovated dealership would bring in more than current property tax revenue, even with a 50 percent reduction. Council members voted 4-1 to approve the tax break.

“Half a loaf is better than nothing,” Councilwoman Mary Hafner said.

Councilman Ronald Lapham cast the lone opposition vote. He felt the council should have favored a shorter term initially and revisit the tax abatement in the future for a possible extension.

Based on building depreciation and commercial property values, city officials estimate the dealership will save approximately $775,000 in city property taxes over the course of the dozen years.

The dealership paid $127,544 in property taxes to the city in 2012, city Treasurer Steve Adair said.

Rinke Chevy/Buick/GMC is one of the oldest businesses in Center Line. It’s the fifth-largest taxpayer in the 1 ½-square-mile facility.

The demolition of the current showroom built in 1949 could start Aug. 1, according to documents filed with the city. Razing the structure will provide more setback space along the city’s main thoroughfare and would provide more parking in front of dealership. New parking lot lighting and a new, north entrance road to the property are planned.

The project could be completed by the end of 2014.

The dealership is not expected to close during renovations.

The Commercial Redevelopment Act of 1978 encourages the replacement, restoration and new construction of commercial property by reducing the property taxes generated by the new investment by 50 percent for up to 12 years. Land, equipment and machinery are not eligible for tax abatement. Property must be obsolete, cleared or vacant land zoned commercial or industrial before June 21, 1975, cleared as a result of fire damage or blight, or be vacant land to be redeveloped as part of a downtown development, a “principal shopping district” or “business improvement district.”